AUSTRALIA could end up “taken as a prize” by China if a US policy of military containment leads to defeat for our American allies, former prime minister Malcolm Fraser has warned.

If we have been a compliant ally of a virtually defeated super-power would we not be regarded as a prize – a prize to be taken?,” Mr Fraser says in a submission to the Asian Century white paper.

He argues that Australia’s decisions to welcome US troops to the Northern Territory and to entertain the idea of US surveillance drones in the Cocos Islands were part of a bigger picture of Australia as a subservient partner in an attempt to contain China by military means.

Yesterday he told The Weekend Australian he believed hostilities between China and the US were likely within the next 40 to 50 years unless the US abandoned its policy of containment.

And his submission argues that China would win.

We know China could sustain massive casualties and would still fight, the US could not,” he says.

If they couldn’t win in Vietnam, if they couldn’t win in Iraq, and they can’t win in Afghanistan, how could they possibly win against China?”

He says China would be able to force the US to withdraw to the western hemisphere, exposing the folly of Australia’s belief in US protection.

Asked what he meant by Australia being taken as a prize, he said: “I don’t think I really want to expand on that.”

A spokesperson for the US embassy in Canberra said it was simply not true that the US was pursuing a policy of containing China.

The thrust of Mr Fraser’s submission is that Australia has naively looked to great powers for protection, first Britain and now the US, and instead must carve out a truly independent role in the region.

He says the stationing of US troops in the NT is “a major and significant mistake”. US marines arrived in Darwin this month for training with the Australian Defence Force.

For America to say that 2500 troops do not constitute a base is nonsense, indeed a fabrication,” Mr Fraser says.

If the US wishes to conduct a hostile action from Australian shores we are complicit in that action and party to it. The Americans will not ask our permission first before the troops are used.”

The US embassy spokesperson said these claims were “absolutely false” because US troops would be on short rotation in various locations and the US “would not do anything from Australia’s bases without full knowledge and concurrence”.